These Funds Went From First to First

Morningstar · Russel Kinnel · 2026-11-04 10:00 UTC

Momentum rules the day.

Momentum rules the day.

Russel Kinnel: Markets and the economy are cyclical. The economy is a reinforcing cycle as growth inspires more investment growth, but eventually it overdoes it and suffers a shock, and then it becomes a reinforcing cycle to the downside as job cuts and cost cuts spur more job cuts and cost cuts. Likewise, markets tend to get excited about a growth area like GLP-1s, covid vaccines, energy, or AI until it gets carried away and then reverses course as supply drives down prices.

That’s why in mutual funds we often see last year’s laggards surge to the lead the next year, while last year’s winners slump. Recently, I looked for some examples of worst-to-first to make that point, and I couldn’t find any. That brings us to another factor:

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